Lotte Chemical Corp is looking into acquiring troubled Singapore petrochemical company Jurong Aromatics Corp (JAC), as the South Korean company continues to push for growth. JAC went into receivership in September 2015, struggling with debt problems in the face of a global commodity rout at that time. It was also forced to halt production for around 18 months until last summer to fix a technical issue at an integrated refining-petrochemical complex in Singapore that had cost around $2.4 billion to build.

Lotte Chemical said on Thursday in a filing to the stock exchange in South Korea that it had submitted a letter of intent earlier this month on the possible acquisition of JAC and that it had been shortlisted on Jan. 10.

"We are studying whether it would be worth acquiring JAC with the letter of intent," said Jung Seung-han, a Lotte Chemical spokesman, adding that it was too early to give other details or put a possible value on the deal.

An industry source in Singapore said that a bidding process had started for JAC, but declined to give details or name companies involved. He did not want to be identified as he was not permitted to speak with media. JAC's facilities include a 100,000-barrel per day condensate splitter and petrochemical units, which produce paraxylene, a raw material for textiles and plastic bottles that are often churned out in China. An acquisition would also potentially boost the supply of petrochemical feedstock naphtha to Lotte Chemical, as well as consolidating its position as one of the largest condensate buyers in Asia, said a Singapore-based trader.

Lotte Chemical currently operates two naphtha cracking centers in the South Korean cities of Yeosu and Daesan, with a combined ethylene output of 2.1 million tonnes per year (tpy). The company also co-owns a 130,000-bpd condensate splitter with Hyundai Oilbank Co that started operations last year. Lotte Chemical has also said that it would invest about $215 million to increase its ethylene capacity to 1.2 million tpy by 2018.